Nordhealth As · OSL:NORDH
Nordhealth As — Q3 2023 Earnings Presentation
27 slides from Nordhealth As's earnings presentation, Nov 14, 2023
Slide 1: Nordhealth
(X] nordhealth
Slide 2: Building the cloud operating system for veterinary and therapy clinics
Building the cloud operating system for veterinary and therapy clinics 14 November 2023
Slide 3: Q3/2023 Performance
Q3/2023 Performance Charles MacBain, CEO Nordhealth 3
Slide 4: Q3 2023 KPIs
Q3 2023 KPIs 21.9% 112% 4.6% 1.8 CAC / new ARR ** Organic ARR growth net retention rate gross churn LTM Q3 2023 LTM Q3 2023 LTM Q3 2023 LTM Q3 2023 1.3% QoQ EUR 34.6M EUR 36.2M EUR 0.43 ARR growth Implemented ARR Signed ARR ARR per share * Q2 2023 vs Q3 2023 Q3 2023 Annualised Q3 2023 Q3 2023 Annual
Slide 5: 1.3% QoQ ARR Growth in Q3 2023
1.3% QoQ ARR Growth in Q3 2023 +1.3% • ARR grew 1.3% 1.6 36.2 • Expansion in Q3/2023 primarily 0.3 -0.4 34.6 driven by Provet Cloud new 0.6 34.1 add-on sales; downgrade in Therapy products • 50% of ARR on Cloud products in Q3/23 vs. 49% in Q2/23 • Provet Cloud signed not implemented ARR does not inc
Slide 6: 22% YoY implemented ARR growth
22% YoY implemented ARR growth 21.9% • ARR grew 21.9% 1.6 36.2 • New customer acquisition 4.7 -1.3 34.6 accounted for 45% of the growth • Strong expansion in Q3/2023 2.8 primarily driven by Provet Cloud user growth and new add-on 28.4 sales • 50% of ARR on Cloud products in Q3/23 vs. 43% in Q3/22 •
Slide 7: Q3/2023 Veterinary Update
Q3/2023 Veterinary Update Charles MacBain, CEO Nordhealth 7
Slide 8: 5% QoQ implemented ARR growth
5% QoQ implemented ARR growth +5.3% 1.6 19.7 • Implemented ARR growth in the third quarter of 2023 stood -0.1 18.1 at 5.3 % 0.7 0.4 • New customer acquisition 17.2 accounted for 39% of the growth • 56% of ARR on Cloud products in Q3/23 vs. 53% in Q2/23 Provet Cloud signed not implemented New Net cus
Slide 9: 32% YoY implemented ARR growth
32% YoY implemented ARR growth 19.7 +32.3% 1.6 • Implemented ARR growth at 17.2 3.5 -0.2 32.3% in LTM ending Q3/23 18.1 • Net retention rate 123.6%, 1.2 primarily driven by Provet Cloud user growth, new add-on sales 13.7 and price increases • Churn of 1.8% • New customer acquisition accounted for 27
Slide 10: Q3/2023 Therapy Update
Q3/2023 Therapy Update Charles MacBain, CEO Nordhealth 10
Slide 11: -2.7% QoQ ARR growth
-2.7% QoQ ARR growth -2.7% • Growth in the second quarter 2023 was -2.7% 0.3 -0.4 -0.3 • Churn rate high due to loss of 16.9 one enterprise customer which 16.5 will also impact future periods • Low net retention rate (including price increases) 96.0%, primarily driven by net downsell • 67% of new cu
Slide 12: 12% YoY Pro Forma ARR growth
12% YoY Pro Forma ARR growth +12.2% 1.3 -1.1 • ARR growth at 12.2% in LTM 16.5 1.6 ending Q3/23 • Net retention rate (including 14.7 price increases) 101.2% • Churn of 7.3% • New customer acquisition accounted for 90% of the growth • 65% of new customers came from Cloud products New Net customers up
Slide 13: Financial Update
Financial Update Mari Orttenvuori, CFO Nordhealth 13
Slide 14: Revenue growth driving profitability, despite significant impact of weak NOK and SEK
Revenue growth driving profitability, despite significant impact of weak NOK and SEK 10.0 90% 94% • Total reported revenues Q3/23 grew +10% 8.0 10% YoY from EUR 8.0M to EUR 8.8M • Share of recurring revenue increased 6.0 from 90% to 94% YoY 4.0 • Q3/23 adjusted EBITDA improved from EUR -1.3M in Q3/2
Slide 15: Recurring revenue growing at a faster rate than revenue
Recurring revenue growing at a faster rate than revenue +14% 8.5 10% 8% • Recurring revenues Q3/23 grew 14% 8.0 5% YoY from EUR 7.2M to EUR 8.3M 8.2 8.3 7.5 0% • Revenue impacted by weak NOK and 7.9 SEK; on a constant currency basis YoY 7.0 -5% growth in recurring revenue would have been 24% vs 14%
Slide 16: Strong financial position and free cash flow improving
Strong financial position and free cash flow improving Free cash flow Q3/22 - Q3/23 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 • Cash flow from operating activities has improved significantly from Q3/22 as a result of -2.9 -0.4 -0.8 -1.8 -0.4 higher revenues and cost cutting measures • Level of CAPEX i
Slide 17: Strong cash position and no debt
Strong cash position and no debt Balance sheet 30 September 2023 5.8 Assets 100 10.2 ● Cash balance remains strong at EUR 27.5 3.6 27.5M of cash and cash equivalents 80 ● Intangible assets primarily consist of 7.9 60 7.9 capitalised R&D expenses 12.2 Liabilities and equity 88.0 40 ● No interest bear
Slide 18: Financial calendar
Financial calendar Q4 2023 results presentation on 5 March 2024. Full year financial calendar can be found on company website.
Slide 19: Key definitions
Key definitions Recurring revenue includes revenues from software subscriptions as well as revenues from of volume-based transactions (e.g., SMS messages) as well as rebates from third parties (e.g. payment solution providers). ARR is implemented ARR that is recurring revenue annualised by multiplyi
Slide 20: Appendix
(X) nordhealth Appendix ay
Slide 21: Profit & Loss statement
Profit & Loss statement Consolidated Income Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q3 2023 Q3 2022 YTD Q3 2023 YTD Q3 2022 FY 2022 Recurring revenue 8 270 7 238 24 359 20 834 28 216 Other revenue 568 789 2 337 1 757 2 833 Total revenue 8 838 8 027 26 696 22 591 31
Slide 22: Balance Sheet
Balance Sheet Consolidated Balance Sheet Unaudited Unaudited Audited EUR in thousands 30-Sep-23 30-Sep-22 31-Dec-22 Intangible assets 12 096 8 993 10 280 Deferred tax assets 546 43 585 Other capitalized long-term expenses 120 37 32 Goodwill 50 572 59 046 57 813 Machinery and Equipment 573 816 733 Ot
Slide 23: Cashflow
Cashflow Consolidated Cash Flow Statement Unaudited Unaudited Unaudited Unaudited Audited EUR in thousands Q3 2023 Q3 2022 YTD Q3 2023 YTD Q3 2022 FY 2022 Cash flow from operations Profit before income taxes (1 797) (3 375) (7 498) (9 743) (14 128) Taxes paid in the period 169 33 (31) (20) (153) Oth
Slide 24: KPIs by business segments
KPIs by business segments 🐶Veterinary Therapy Total Cloud Hosted Cloud Hosted Cloud Hosted All 2022-Q3 (€M) € 5.6 € 8.0 € 6.5 € 8.2 € 12.2 € 16.2 € 28.4 2023-Q3 (€M) € 10.1 € 8.0 € 7.4 € 9.2 € 17.4 € 17.2 € 34.6 Growth 78.6% -0.1% 12.7% 11.7% 43.3% 5.9% 21.9% Migration (€M) € 0.2 € -0.1 € 0.0 €…
Slide 25: Business Segments
Business Segments 🐶Veterinary Therapy Cloud Hosted Cloud Hosted Products Provet Cloud Provet Legacy (Finland) EasyPractice Aspit (Norway) Nordhealth Pay Sanimalis (Norway, Sweden) Diarium Vetserve (Norway) Nordhealth Connect Vetvision (Denmark) Navisec Flex Vetera (DACH) Share of recurring…
Slide 26: Organisation size ready for scale
Organisation size ready for scale At the end of Q3/23 total number of employees amounted to 381 (377 at the end of previous quarter) of which 128 (127) work in Therapy, 226 (222) in Veterinary and 27 (28) in HQ G&A. 404 392 400 378 381 377 332 257 Q4/2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2
Slide 27: Slide 27